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hpo economic commentary, 1st quarter 2024

What does a typical crisis look like?

  • Consumer sentiment remains negative in all major regions but has recently recovered somewhat in the US and large parts of Europe.
  • In China, sentiment remains at a low level.
  • Retail sales in the West continue to move sideways, with a slight downward trend.
  • The Business Confidence Index (BCI), essential for industry, remains below the neutral level of 100 index points in all major regions.
  • hpo has analysed the pattern of all major crises in the machinery sector since 1991. The current recession in the German machinery sector recession is running along the middle path of the four major crises in the last 33 years. The trough is likely to be reached during the year.
  • However, the economic pattern in other industrial segments deviates strongly from the pattern of the general machinery industry in various ways.
  • In the last two years, the inflow of foreign direct investment to China has fallen sharply. In Germany, inflows are also well below the long-term average. The USA is currently best at attracting foreign direct investment thanks to relatively low energy costs and a very active and costly industrial policy.

Josua Burkart, Benjamin Boksberger

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